Tomoyoshi SATO

ABS has prepared overseas study seminars in summer and winter, where students can learn about Islamic Finance and Halal Business in Malaysia, which is expected to become a developed country by 2030. The one-week program is designed to enable participants to gain a deep understanding of real-world business practices based on the knowledge they have gained, through sessions on the “Basics of Islam,” lectures at the Universiti Malaya（UM） and Universiti Sains Islam Malaysia (USIM), visits to halal certification organizations, and visits to local Malaysian companies as well as Japanese enterprises operating in Malaysia.

I applied for this seminar because I used to work in Malaysia as an expatriate, and after returning to Japan, I developed a strong interest in the Southeast Asian market and have been keeping a close eye on its future business growth. In addition, I thought I would be able to learn together with ABS students who have similar aspirations and interests, and gain insights and learning from different perspectives within the limited two-year period at ABS.

Understanding religion is essential to understanding Malaysia, a multi-ethnic country where Islam is the state religion. Muslims pray five times a day in the direction of Mecca. Mosques (places of worship) are easily accessible as part of the social infrastructure throughout the city. During the study seminar, I had the opportunity to listen to the Qur'an being read aloud at USIM. In Islam, emphasis is placed on correctly understanding the teachings of Muhammad and reciting the Qur'an aloud, and memorizing the Qur'an in Arabic is considered important among Muslims. This knowledge of Muhammad's teachings (Islamic worldview) is the starting point for understanding Islamic Finance and Halal Business.

In the Islamic world, it is not acceptable to make money only for oneself; rather, wealth should be distributed to the poor. The prohibition of receiving or paying interest (Riba) in Islamic finance is based on Islamic teachings. In Japan, funding from banks is considered a loan, and borrowed funds are treated as liabilities on the balance sheet with interest to be repaid. However, Islamic financial instruments do not require interest payments following Shariah compliance. The funded business pays dividends based on the profit generated. In other words, if an entrepreneur comes up with a good business model, an Islamic bank will provide funding, and the entrepreneur will pay dividends once the business generates a profit. In Japan, there is a business practice of prioritizing transactions with major companies based on creditworthiness. However, in Malaysia, where the Islamic financial system is in place, it is easier for entrepreneurs with low credit ratings to obtain funding during the start-up phase. I found it very interesting that this system functions in line with Malaysia’s national strategy of fostering entrepreneurship.

Another of the most important concepts regarding the acceptance of Muslims in Japan is that of Halal and Haram. Halal is an Arabic word meaning “permissible,” and Muslims choose their clothing, food, cosmetics, etc., based on halal standards. On the other hand, Haram is the opposite of Halal and refers to what is forbidden to Muslims (e.g., foods they are not allowed to eat).

During this study seminar, we had the opportunity to visit Ajinomoto Malaysia, a halal-certified company that has operated in the region for more than 50 years and was awarded the honor of “The Best Malaysian Halal Certificate Holder” in 2021. The company has a strong presence and high recognition in the region. We learned how Japanese companies have expanded into the Islamic market, how they operate their factories in accordance with halal certification, and what kind of corporate strategies they pursue based on market insights specific to the Islamic world.

I participated in both the August 2024 and February 2025 overseas study seminars. The winter seminar focuses more on halal business, which made it especially interesting to learn through food and tourism, areas that are familiar to everyone. Malaysia’s halal certification is highly recognized globally. I felt that the halal business in Malaysia has high potential, as it can expand into the Middle East, Africa, Europe, and the U.S., using Malaysia’s halal certification as a gateway. I personally recommend this seminar to anyone involved in related industries. It is also worth noting that the one-week program offers a good balance of structured learning and free time, allowing participants to explore Malaysia through sightseeing and leisure activities.

Finally, I would like to express my sincere thanks to the officials of the Malaysian institutions, the ABS Secretariat, and Professors Hosoda and Ichino for leading us. I had fruitful learning experiences through both the summer and winter seminars. Thank you very much.